Because many of the people who purchase renters insurance are new to having coverage, we frequently get calls after a newly insured person has received their policy documents in the mail or electronically. What’s the number one question they ask us?
Why did you sell me a homeowners policy when I rent an apartment? Why does my renters insurance policy say homeowners on it? I don’t need homeowners insurance because I don’t own the home!
Why Does My Renters Insurance Policy Say Homeowners?
Did you know that most insurance companies use the same policy forms? There’s an organization called the Insurance Services Office that’s responsible for writing the policy forms and endorsements, and they’re generally used by all carriers. So, just about every renters insurance policy will declare itself to be a “homeowners” policy. But why? It’s not for someone who owns a home…
If you take a close look at your renters insurance policy, you’ll notice that it looks very similar to a homeowners policy. It actually is a standard homeowners policy, with two notable exceptions. The dwelling coverage has been removed, for obvious reasons. You’re not responsible for the structure itself, to the extent that you’re personally liable for damage caused to the residence. The other thing you won’t see on a renters insurance policy is coverage for “other structures.” That’s because as a tenant, you generally don’t have any other structures. If you did have one, such as a backyard shed, you’re again not responsible for it unless you personally cause the loss.
Renters insurance liability kicks in if you cause the loss to the structure. This means that if you negligently cause property damage, your renters insurance liability can cover those damages so that you don’t have to do it out of pocket.
Why does my renters insurance policy say homeowners insurance? Because it is actually derived from the homeowners policy, minus certain coverage’s not generally relevant to a renter. Even though it says homeowners, it really is a renters policy. The declarations page will tell you that, as well as the HO-4 policy form.
To find out more about renters insurance that says homeowners insurance, call Effective Coverage at (800)892-4308 or click above for online renters insurance quotes!